Karen S. Cook

Power, Equity and Commitment in Exchange Networks

Exchange theory has the virtue of bringing both power and equity together in a single analytic framework. However, exchange theory has focused largely upon analysis of the dyad, while power and justice are fundamentally social structural phenomena. First, we contrast economic with sociological analysis of dyadic exchange. We conclude that (a) power and equity from social exchange theory carry us beyond economic theory of dyadic exchange; yet (b)for power and equity to be studied effectively, analysis of systems larger than the dyad is needed. Second, we introduce exchange networks to extend power and equity analysis into more macroscopic n-person social structures. Third, a laboratory method is reported for controlled study of exchange networks as bargaining structures. Finally, we present findings which show that (a) power is an attribute of position in a network structure observable in the occupants behavior, even though the occupant does not know what position or what amount of power s/he possesses; (b) equity or justice concerns constrain the use of that power; (c) emergent interpersonal commitments impede the use of power; and (d) when power is unequally distributed among actors in a network, females form stronger commitments to their exchange partners than do males. In conclusion, we discuss the importance of commitment in distinguishing between economic and social exchange theory.

Uncertainty, trust, and commitment formation in the United States and Japan

A theory of trust proposed by Yamagishi and Yamagishi provides the basis for the prediction that (1) social uncertainty promotes commitment formation between particular partners and (2) high trusters tend to form committed relations less frequently than would low trusters when facing social uncertainty. These predictions receive support in two experiments conducted in the United States and Japan. The findings provide empirical support for the theory of trust that emhasizes the role of general trust (trust in others in general) in emancipating people fromt the confines of safe, but closed relationships. The results also offer a theoretical explanation for what have been viewed in the past as cultural differences.

Generalized Exchange and Social Dilemmas

In generalized exchange, the rewards that an actor receives usually are not directly contingent on the resources provided by that actor; therefore free riding can occur. The actor can receive benefit without contributing. Scholars interested in generalized exchange systems have often overlooked this inherent free-riding problem and thus have been overoptimistic in concluding that generalized exchange promotes mutual trust and solidarity among the participants. A more complete understanding of generalized exchange requires that the underlying social dilemma in such situations be appreciated fully. This paper represents our initial efforts to bridge two research traditions ― research on social exchange and research on social dilemmas

Network Connections and the Distribution of Power in Exchange Networks

This article presents an extension of recent work on exchange networks and specifies theoretically the implications of different types of network connections for the distribution of power. The paper employs power-dependence principles to make predictions concerning the distribution of power in differently organized exchange networks. The results of several laboratory experiments are reported testing these predictions. Computer simulation results are also presented testing predictions that extend beyond the experimental work. The findings demonstrate that the locus of power in exchange networks is determined by the nature of the network connections (positive, negative, or mixed) and the scarcity of resources, factors that alter the underlying dependency relations.

Power in exchange networks: a power-dependence formulation

Abstract Recent developments in exchange network theory include new formalizations of techniques for specifying the distribution of power in exchange networks. In this article we present a theory-based procedure for identifying power positions in negatively connected exchange networks. This development grows out of earlier work by Emerson on power-dependence relations. The procedure for determining the distribution of power is applied to various common networks also addressed in other articles in this special issue. We compare this approach with the formal method developed by Markovsky, Patton and Wilier (1988), commenting on similarities and differences. In conclusion, we discuss the limitations of our procedure and indicate topics in need of further empirical research.

Expectations, evaluations and equity.

One important reason for the inconsistent findings of the research on inequitably over-rewarded individuals is the failure to understand and control the process by which rewards come to be related to the formation of expectations about rank or position on the dimensions of evaluation which are the basis for the allocation of rewards in social systems. If individuals have well-defined expectations concerning position or rank on the dimension of evaluation which serves as the basis for allocating rewards, when reward-expectations are violated the individual will define the situation as unjust and will attempt to act equitably when allowed to distribute rewards. If, on the other hand, an individuals rank expectations are not clearly defined, rank expectations emerge which tend to be consistent with the actual distribution of rewards. In this case, individuals come to define the initial distribution by some third party as equitable, and when given the opportunity to allocate rewards they maintain the existing reward distribution, continuing to allocate more pay to themselves.

The private rejection of unfair offers and emotional commitment

In a series of experiments, we demonstrate that certain players of an economic game reject unfair offers even when this behavior increases rather than decreases inequity. A substantial proportion (30–40%, compared with 60–70% in the standard ultimatum game) of those who responded rejected unfair offers even when rejection reduced only their own earnings to 0, while not affecting the earnings of the person who proposed the unfair split (in an impunity game). Furthermore, even when the responders were not able to communicate their anger to the proposers by rejecting unfair offers in a private impunity game, a similar rate of rejection was observed. The rejection of unfair offers that increases inequity cannot be explained by the social preference for inequity aversion or reciprocity; however, it does provide support for the model of emotion as a commitment device. In this view, emotions such as anger or moral disgust lead people to disregard the immediate consequences of their behavior, committing them to behave consistently to preserve integrity and maintain a reputation over time as someone who is reliably committed to this behavior.

Trust Building via Risk Taking: A Cross-Societal Experiment

The role of risk taking in building trust relations has largely been overlooked in the burgeoning literature on trust in the social sciences; yet it is central to understanding how trust develops. We argue that a series of risk-taking behaviors is indispensable to building a trust relation. We conducted experiments in Japan and the United States to examine the independent and cross-cultural effects of risk taking on trust building. The results of these experiments indicate that the American participants took more risks than did the Japanese, supporting the general claim that Americans are inclined toward risk taking and trust building. Even so, the Americans were no better than the Japanese at improving the level of cooperation. The cumulative results of these experiments imply that risk taking is a critical element in trust building for Americans, but less so for the Japanese. Our results show clearly that it is important to distinguish trusting behavior from cooperation and to measure them separately if we are to study trust and trust building in relation to social cooperation.

Networks, Norms, and Trust: The Social Psychology of Social Capital∗ 2004 Cooley Mead Award Address

Networks of trust relations often emerge under conditions of uncertainty or risk to facilitate social exchange. Under some conditions, such networks represent a form of social capital that can be mobilized in support of general social cooperation in the society. Under other conditions, however, such networks may have negative effects on the degree of social cooperation in the society. To examine these conditions I draw on experimental work on cooperation and trust, as well as recent work on social exchange under conditions of uncertainty and risk. After an introduction, in which I acknowledge those who have been influential in my career, I comment on the implications of this work for recent research on social capital.Networks of trust relations often emerge under conditions of uncertainty or risk to facilitate social exchange. Under some conditions, such networks represent a form of social capital that can be mobilized in support of general social cooperation in the society. Under other conditions, however, such networks may have negative effects on the degree of social cooperation in the society. To examine these conditions I draw on experimental work on cooperation and trust, as well as recent work on social exchange under conditions of uncertainty and risk. After an introduction, in which I acknowledge those who have been influential in my career, I comment on the implications of this work for recent research on social capital.

A cross-level process theory of trust development in interorganizational relationships

Most research on trust in interorganizational relationships focuses on a single level of analysis, typically the individual or organizational level, and treats trust as a fairly static phenomenon. To stimulate more cross-level research, we propose a theoretical model that explains how trust in interorganizational relationships is related across various levels of analysis. At the same time, our model emphasizes the dynamic aspect of trust by examining how trust develops throughout consecutive relationship stages. Drawing from several programs of research, we identify the mechanisms that drive the progression of trust across levels as the interorganizational relationship unfolds. Starting with the boundary spanner as the key individual at the beginning of a new collaboration, we specify how trust gradually becomes part of the fabric of organizational action. By integrating micro and macro approaches over time, the proposed model contributes to a better understanding of how trust evolves in interorganizational relationships.